Which of the following properties cannot be linked with Marginal propensity to consume?

• Value of MPC is between 1 and infinity.
• If the entire additional income is spent i.e. ΔY = ΔC, it implies that MPS = 1
• MPC of developing countries is more than the MPC of developed countries.
• MPC of poor is less than MPC of rich because of availability of resources. Poor people do not have much resources to increase there spending as compared to that of rich.
• If we have savings in the economy then MPC can never be equal to 1.

1, 2 and 4

The correct answer is Option 1: 1, 2 and 4

1. Value of MPC is between 1 and infinity: This is incorrect. MPC typically ranges between 0 and 1. If MPC were greater than 1, it would imply that consumption is increasing faster than income, which is not sustainable.

2. If the entire additional income is spent i.e., ΔY = ΔC, it implies that MPS = 1: This is incorrect. If all additional income is spent, then MPC = 1 and MPS (Marginal Propensity to Save) = 0, not 1.

3. MPC of developing countries is more than the MPC of developed countries: This is generally considered correct. In developing countries, people often spend a higher proportion of their additional income due to lower levels of income and savings.

4. MPC of poor is less than MPC of rich because of availability of resources. Poor people do not have much resources to increase their spending compared to that of the rich: This is incorrect. Typically, poorer individuals have a higher MPC because they spend a larger proportion of their additional income on consumption due to their lower income and higher immediate needs.

5. If we have savings in the economy then MPC can never be equal to 1: This is correct. If MPC were 1, it would imply that there are no savings, as all additional income is spent.